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Friday, June 23, 2006

Sell, Sell, Sell

I have addressed the issue of the put options before, but one of our commenters brought it up, and I have read more on the issue since then, so I figured it merited addressing. It is one of the genuinely interesting subjects brought up by the conspiracy theorists, that can actually be discussed intelligently without immediately diving into nutcase zionists with thermite charges theories.

As some have pointed out, the 9/11 Commision report I have previously mentioned, refers to an investigation into ties with Al Qaeda, which they consider part of a coverup, because it would be irrational to conclude Al Qaeda had anything to do with this, and they should have investigated ties to shadowy neo-con/Zionist/Illuminati banks etc. instead.

But, as the report says (emphasis mine):

A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10.

This missed the larger point that the investigators not only found the purchasers of the stock to not be suspicious, but the purchase itself was not suspicious. In this case, the puts were only part of a trading strategy to hedge their investment in UAL stock. In this case:

At the time their stock was selling for around $30 a share, so we are to believe that these evil international banker conspirators, upon knowing that 2 United Airlines planes were going to be hijacked, went out and bought over $3 million of stock in the company? Not the most likely plan.

Buying stock and taking out a put option to hedge it, is a common investment strategy by the way. There is actually a mathematical way to calculate how many options you need to buy based on its value and volatily, called the delta, which is way beyond the scope of this post, but click on the link if you are interested in an explanation.

Regardless, even if this was some type of conspiracy, how much money was made off of purchasing these options? Not that much. Insight Magazine did an article on this and found the following:

On Sept. 6, 2001, the Thursday before the tragedy, 2,075 put options were made on United Airlines and on Sept. 10, the day before the attacks, 2,282 put options were recorded for American Airlines. Given the prices at the time, this would have yielded speculators between $2 million and $4 million in profit--hardly what any analyst would call a killing in the options markets. Based on historical data for both airlines, the put options just prior to Sept. 11 neither were dramatic nor unprecedented.

A lot of money for you and me, but peanuts by international banking standards.

Much has been made regarding the volume being more than usual, but options trading is not like regular stock trades, where shares trade hands constantly, options are contracts largely taken out by investment firms, that are purchased from other investment firms. Thus, they are not anonymous, if someone does something unusual, they have to come back to collect their money later, and whoever got cheated is most likely going to look into it. Additionally the volume varies wildly depending on the investment climate and the firms involved.

Loose Change mentions 3,150 options as being 4 times its daily volume. But as Insight reports, this was not that much of an unusual amount. On October 19, 2000 6,625 put options on UAL were sold, over twice the amount of September 6, 2001. That was up from just 374 puts the previous day. Oddly enough, I don't remember any hijackings of UAL planes taking place any time soon after that.

The same goes for the other two companies mentioned. In actuality, if someone wanted to make money of the attacks, the best way would not be to buy puts in the companies involved, but to short the entire market, or buy oil futures. The Dow dropped over 16% in the weeks after 9/11, and buying puts on the much larger index market could have been done in larger quantities without drawing any attention, but then again the Loose Change boys couldn't put this much more complex theory into an ominous looking graphic in their movie that could be understood by their 20-something audience.

Update: An October 8th, 2001 article in Barron's, puts another nail into the coffin of this theory:

One large UAL put order was sent to the bustling CBOE floor in the days prior to Sept. 11 by a customer of Deutsche Bank. The primary trading post for UAL expected to handle the whole 2,500-contract order.

Instead, the customer split that into chunks of 500 contracts each, directing each order to various exchanges around the country, according to people familiar with the trade. Moreover, some of the options have yet to be exercised, possibly because those customers' accounts have been frozen.

But some option veterans say there's nothing unusual about either the size or manner in which the order was handled. Options in UAL are heavily traded, usually by institutions hedging their stock positions. Activity in AMR options also isn't conclusive. The heaviest trading was not in the cheapest, short-dated puts that would have provided the biggest gains to a conspirator with foreknowledge of the events of Sept. 11. Moreover, at least one analyst had issued a "sell" recommendation on AMR the previous week.

Finally, these and many other options had grown quite cheap in the weeks prior to the terrorist attacks -- another reason put buyers might have been legitimately attracted to them.

53 Comments:

Did you read Griffin on this yet? He says that estimates of the profits ranged from $10 - $15 BILLION dollars (p. 53) and cites a study by Allen Poteshman, prof of finance at Univ of Illinois that "does provide evidence that is consistent with the terrorists or their associates having traded ahead of the September 11 attacks."

Also, there was a high volume in put options on Morgan Stanley, which had 22 floors in the WTC.

Griffin says the 9/11 Commission does not even give the name of this "innocuous" institutional investor or any of the others. Did they even put anyone under oath?

It is not even a published paper, as of March 2004 it is still listed as a draft. All he is saying is that in the 5 days before 9/11 more people bought put options in UAL and AMR relative to the market as a whole.

So, in any given 5 day period there is a 50% chance that this will happen. Without comparing this to the correlation between the two, this is meaningless. Even then you could not prove a connection, just come up with a probability.

Besides, his assumptions are based, not on an international zionist cabal making $15 billion through a huge number of diverse investments, but on a terrorist, or some other small investor buying a limited number of puts in just the two airlines after September 6th (based on when Osama said he knew about the timing of the plot). So the entire premise of his argument is based on an assumption that is contrary to what you believe.

Within the boundaries that you set for yourself (e.g. that Al Qaeda was the force behind 9/11, which means when the 9/11 Commission has language such as the put option investor(s) having not conceivable relation to Al Qaeda,

Which are ironically also the boundaries in the study that Joan cites. Why don't you lecture her?

Those of us who know better won't have it.

I am still waiting for the list of all the things on this blog, the reader's guide, the Screw Loose Change video, or 9/11 Myths that are lies, distortions, misrepresenations or factually incorrect. Thus far I received exactly zero examples, as opposed to the dozens that we have come up with for Loose Change, or the 9/11 "truth" movement in general.

An amazing record of accuracy for a bunch of people who are supposedly so delusional.

Within the boundaries that you set for yourself (e.g. that Al Qaeda was the force behind 9/11, which means when the 9/11 Commission has language such as the put option investor(s) having no conceivable relation to Al Qaeda, you think this is a reasonable approach to buttress your argument), you set up a situation where:

a) you see your thought process and conclusions as unassailable

b) we see a person who doesn't have a clue to see the the 100 reasons to believe that the 9/11 Commission was anything except a cover-up commission. You aren't even beginning to allow for facts, contradictions, manipulation by Zelikow, media etc.

With the constraints you put on yourself, you'll always be preaching to the choir that has been duped.

Sorry to delete and repost my comment out of order.... just trying to fix typos.

The book by D R Griffin: 9/11 Commission, Ommissions and Distortions is a good starting points, as mentioned elsewhere.

I don't mean to be quarrelsome, but if you think that the 9/11 Commission not putting Bush / Cheney under oath, not questioning Guiliani how he knew that the builings were comming down, not even addressing the collapse of Building 7, not following up ont he Mineta testimony, if you don't see a gigantic problem here, there really is no reason for us to try to conduct any kind of conversation on the matter.

not questioning Guiliani how he knew that the builings where comming down,

The buildings were on fire had huge holes in the middle and freaking leaning over! Why don't we question Giuliani as to how he knows to go to the bathroom every day while we are at it?

not even addressing the collapse of Building 7

The 9/11 Commission was on the events leading up to the attack and the intelligence failures involved, not an engineering report. That is what the reports by FEMA, NIST, and the ASCE are for. You believe those are coverups too anyway, so what would be the point?

Also, although there's no reason Joan and I, and the paper Griffin refers to, and Griffin all have to believe the same thing in lock step. I think, however, if Joan and I sat down and discussed the issue in-depth, I believe we would be in complete agreement that the whole main-stream idea of Al Qaeda and OBL is largely a convenient patsy, and therefore the idea that Wall Street connected types aren't necessarily on some far removed point away from the patsy "terrorists".

The Able Danger cover up by the 9/11 Commission was done (most likely decided by Zelikow manipuation / "say so" as is true of almost every critical element) because the more the public gets the idea that the "hijackers" were being being monitored for YEARS before 9/11, the public might get a clue that they were being protected.

For what's it's worth, if anyone thinks that any crime should be prosecuted based on eye-witness testimony to the exclusion of physical evidence including photos or videos, you are on my stupid list and you are disqualified from any further comment here.

Judge: well, hundreds of peopel saw you murder this person, but no one shot a video of it, so your free to go.

Fact is there IS indeed video footage of what happened. Video is usually a more reliable witness than people in that it is not left to interpretation. Now, when you have people seeing "humans" in windows going at 500MPH and a few videos showing the same event at different angles, I'd say the video evidence would be more compelling, but that's just me. In your world, you would actually take the word of those who saw people through the windows just before the plane met its demise.

James, one of my favorite bits is the ridiculous claims that hundreds of millions in stock gains due to 9-11 were never claimed. Apparently these folks believe that there's tons of money out there going unclaimed; this may be why I get all those emails from bankers in Botswana hoping that I'll file the necessary paperwork to become next of kin for that businessman killed in an Alaska Airlines crash.

Video is usually a more reliable witness than people in that it is not left to interpretation.

sure, you say that now, but if they release the tape of the 757 hitting the pentagon the first words out of your mouth will be "video can be easily faked"

besides, its entirely possible none o the 3 cameras caught anything, the hotel an dgas station cameras would have been pointed at their own parking lots, not the pentagon, and probably had very low resolution

the camera over the highway, like many highway cameras probably had a very low framerate, and the entire incident may have occured between frames

the camera over the highway, like many highway cameras probably had a very low framerate, and the entire incident may have occured between frames

Wasn't it mentioned there were around 80 tapes of the incidence? That would be hard to fake since they come from varied sources and not "found" by unknown US military. I'm sure some of those tapes caught something. I guess we'll know if and when FBI decides to come clean.

C. Fire a missle(or fly a smaller plane) into the Pentagon in broad daylight, during rush hour traffic, in plain view of anyone who was passing by. Rig the building with explosives, bribe/bully/coerce all people involved in planting explosives, firing missile or piloting drone military jet. Plant/bully/coerce hundreds of eyewitnesses, plant 757 specific debris including a 1200 lb Main Landing Gear Strut and RR engine turbine wheels, arrange for breakaway light poles to be knocked down in a very confusing manner, pre-damage a 20 ton generator to make it look like a 757 hit it as opposed to making a clear path for the missile/small military plane. Plant DNA evidence of AA77s passengers and crew, confiscate and destroy all tapes which caught actual event. Release security videos after carefully editing them to make it look like a 757...oh wait nevermind they forgot to do that. Disregard. Moving on....Arrange for flight 77 to land somewhere covertly - enslave or kill pax and crew, bribe/coerce/bully all FAA ATC controllers who witnessed this, bribe/coerce/bully all people who were involved or may have witnessed AA77 land at its secret location. Cover all of this up so noone(especially all those who you've bribed/bullied/coerced) blows the whistle and brings the whole inside job down.

All you have to do to understand how 9/11 could have been carried out is read the Northwood documents. Why not ask Lemnitzer why he was going to use drones and fake passenger lists?

As for the DNA "evidence" you may want to read here how that was achieved.

We should not take speculative guesses because that makes you folks cringe and disbelieve the available evidence. I agree more than a few witnesses saw something that looked like a commercial airliner hit the Pentagon. Going by Northwoods this plane could have easily been a mock-up plane. And although we are told by a military witness that he found passengers still strapped to their seats in the aftermath, truth is all DNA analysis took place not on site but on one military base in Delaware. To date, there have been no pictures provided of people strapped to their seats from the remnants of flight 77. In fact, very little of the inside crash area has been released that shows anything but burned out office equipment or people in the building that were caught in the blast. Again, that's just what we see or what we're allowed to see.

So stop the speculation. Look at the available facts and see if they match up to the official account. IMO, they never do.

To date, there have been no pictures provided of people strapped to their seats from the remnants of flight 77.

You fucking LIAR. They were posted ON THIS SITE, in a thread which you commented in! What the hell is wrong with you?

And what the hell's the diference anyway? No matter what evidence we show you, you'll say it was faked. Only an utter moron would beleive that government managed to bring in a couple dozen tons of aircraft parts and scatter them without anyone noticing, yet no matter how much evidence we show you, that's exactly what you keep claiming.

All you have to do to understand how 9/11 could have been carried out is read the Northwood documents. Why not ask Lemnitzer why he was going to use drones and fake passenger lists?...blah.....blah...blah

James, I wish yahoo archived options on their financial page because sometime early this month the $30 strike for AMR saw 8,000 put options, followed by 6,000 a week later. In between the volume was pretty low (100~500)

Following the CTs logic, there mustve been a horrific terrorist attack on two seperate occasions earlier this month.

i wanna start by saying my father Lt.Robert F. Wallace died on 9/11 in the trade center,along with almost 3,000 others.I've seen loose change and its not about put options and stock trades... its about conspiracy theorists whitch is either the Goverment or the "terrorist" either way its a conspiracy... so you can stop calling people that dont belive the origanal story conspiracy theorists it pisses me off. I just ask for a new investagation a nongoverment founded one, one in witch case the evidence was trown in the garbage in Staten Island somewhere. Now when the happens we'll all have some answers!!!

http://www.briansproperties.com/realtor When I was looking to buy a home in colorado and after finding and calling so many realtors that never returned my calls i finally found Brian.So i thought i would post and let other people know about his site if they were having the same toubles as i was.realtor He is a true professional

I clicked on the "Source" link on claim 2 that allegedly disproves the claim that Loose Change incorrectly covered the put options leading up to September 11.

A link with the word "Source" should obviously, I would think, lead to the source of the irrefutable confirmation of said fallibility. However, it leads to another blogger page without a cited reference clearly marked.

Do you even know wat a put option is... ya nobody made any money off the ones that were placed on AA because they never decided to go get their money... Ya some of the stuff isn't completely true in Loose Change but there is most definately more information that was and is not going to be released. And of course it is for "national security reasons," Well I guess you can be another closeminded individual who doesn't think for themselves and lets coorprate america run their lives.... we harbor lies